Many commentators have expressed concern that while organisations are legally required to close (for example, being in a tier three area) will benefit from the support of the expanded Job Support Scheme (JSS), in other areas, particularly those with tier two restrictions, organisations are suffering significantly from reduced footfall. The limited support in the original JSS would not have been sufficient to enable them to keep staff on full pay during the Covid-19 (Coronavirus) pandemic.
In a welcome move, the Chancellor, Rishi Sunak, announced substantial increases in the support available to employers under the JSS. The number of hours which the employee is required to work has fallen from 33% to 20%, and the requirement for contributions from the employer is now just 5% of pay costs for hours not worked, substantially less than the 20% employer contribution currently required under the Coronavirus Job Retention Scheme, with the government funding up to 62% and the employee bearing a reduction in pay of 33%.
This is further supported by a new grant scheme under which the government will fund local authorities to enable them to make direct cash grants where they believe they are most needed. This will enable local decisions on how best to distribute the grants under which businesses in hospitality, leisure and accommodation may receive a grant worth up to £2,100 every month. These are additional to the grants of up to £3,000 available for employers which have been legally required to close. The grants can be backdated to August where organisations have been operating in areas with enhanced restrictions.
Of course, the new grants and revised JSS will not represent the amount of income that many organisations will have enjoyed prior to the start of the Coronavirus pandemic, and they are rightly not intended to do so. But these measures will provide vital funding for many organisations enabling them to afford to keep staff fully supported through the second wave. The communities which were facing the stark reality of being unable to pay their employees at the reduced level of working, even under the original JSS and as a result expected in many cases to be forced to permanently close, now have some breathing space during the forthcoming months.
Helen Watson, is head of employment at law firm Aaron and Partners.
